WATCH ABOVE: Michael Irvine listed his property in Florida but never found a renter. Despite not making any US money Airbnb is withholding money from his Ontario rentals to pay off income tax they say he owes the IRS. Mark Carcasole reports.
TORONTO – A Toronto property owner says the Internal Revenue Service, through the home-sharing service Airbnb, is withholding money he earned in Canada while claiming he owes U.S. income taxes. He hopes to alert other Canadian Airbnb hosts to a clause he feels is not visible enough.
Michael Irvine has used Airbnb as a guest and then as a host for a while now.
“We really enjoy it,” Irvine said. “We meet a lot of people from around the world. Most of our experiences have been pretty positive.”
Irvine and his wife Luana rent out a room in the Yonge and Bloor area of downtown Toronto on the website, as well as another space in Port Stanley, Ont., west of Toronto.
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Having enjoyed the experience of renting out their two Ontario properties, the couple decided a little less than a year ago to rent out their property in Fort Lauderdale, Florida on Airbnb.
They had a couple inquiries there, but no takers.
Eventually they felt forced to take the listing down when they got a note from the company.
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Irvine claims the notification stated “that (Airbnb) would be withholding taxes for the IRS. This happened without us actually having rented the house in Florida, so we hadn’t earned any money in the States whatsoever.”
Soon after, the Irvines noticed the company was withholding a total of $150 from payments they were due on rentals of their Ontario properties.
A representative for Airbnb said in an email that since the Irvines have a U.S. listing “we are required to collect this info.”
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“You can avoid any future withholdings by submitting your taxpayer information,” the statement said. “However, any amounts that have already been withheld and remitted to the IRS cannot be returned to you by Airbnb.”
Irvine said he refuses to submit his info to the IRS as he feels it violates his sovereignty.
“My feeling as a Canadian is that the IRS has no business in my pockets in Canada when I’m doing business in Canada, earning money in Canada,” he said.
Toronto tax lawyer Sabina Mexis said although Irvine is entitled to his personal feelings Airbnb is on solid legal ground despite the fact that Irvine hasn’t earned one U.S. cent.
“You have to provide them with your tax information. Even if you’re not a resident of the U.S.,” said Mexis. “If you don’t provide them with your information, they’re going to withhold and remit tax so that they’re compliant from a U.S. tax perspective with the IRS.”
Mexis said everyone entering into any kind of agreement needs to be vigilant and read the terms and conditions of a contract.
“I think it speaks to the fact that it’s important to always make sure that we read our contracts carefully and make sure that we’re not caught unawares.”
In a statement, the company said, “we’re required by US law to collect taxpayer information from hosts who appear to have listings in the US…We are reaching out to this host to resolve the issue.”
Irvine said he has stopped listing his Toronto and Port Stanley spaces on Airbnb to prevent any more money from being withheld.
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